When a monopolist engages in perfect price discrimination, the quantity produced and sold
A)is lower than the quantity produced and sold if it adopted a single price.
B)is larger than the quantity produced and sold if it adopted a single price.
C)is the same level as that produced and sold if it adopted a single price.
D)could be lower, higher, or the same as that produced and sold if it adopted a single price.

Question

Quizplus · Accepted Answer

Under perfect price discrimination, the monopolist charges each consumer the maximum amount they are willing to pay, resulting in higher overall revenue. Since the monopolist is able to extract the entire consumer surplus, the quantity demanded by consumers at the highest possible price points would be larger, leading to a higher quantity produced and sold compared to a situation where a single price is charged.

When a Monopolist Engages in Perfect Price Discrimination, the Quantity